Argentina’s economic and social crisis: the poverty rate grew to 40.2% in 2022 according to private estimates

Private projections suggest that poverty has increased by about 4 percentage points since the inflationary burst in July of last year. Real wages fell to the lowest levels observed since 2003.

The economic reactivation that the Government presumed was almost completely exhausted in September of last year with the fall of the EMAE index, but the social recovery ended even earlier.

The econometrician from the Torcuato Di Tella University, Martín González Rozada, prepared his own Nowcast to measure the country’s poverty rate based on official INDEC statistics such as the basic basket and the evolution of the CPI.

The results are dramatic: poverty would have reached up to 40.2% of Argentines in December 2022.

“The projected incidence is a weighted average of a poverty rate estimated at 39.4% for the third quarter and 41.1% for the fourth quarter of 2022. This projection suggests that 40% of people live in poor urban households”, reads the economist’s report.

This is the measurement of the mobile semester formed between July and December, an indicator that coincides in principle with the semi-annual publication that INDEC will release starting next March 30.

According to Rozada’s estimates, the poverty rate would have accumulated an increase of 3.7 percentage points since the inflationary outbreak of July 2022, since then the basic basket of goods systematically increased above the general price level and wages.

In periods of high inflation rates, it is common for increases that are more than proportional to inflation in the basic basket to be associated with increases in the poverty rate.

“The urban population captured by the EPH in the July-December 2022 semester was estimated at around 29 million people, which implies that around 11.7 million live in poor urban households,” explains Rozada.

Likewise, the poverty rate increased by 4.7% since Alberto Fernández and Cristina Kirchner came to power in December 2019. The promised recovery never materialized in reality.

The evolution of wages in real terms was a transcendental factor in explaining the deterioration of the social fabric.

The Argentine economy operates with the lowest real remunerations since December 2003, and only since December 2019 have they accumulated a real fall of 4.6% over the floor of the previous administration.

With information from La Derecha Diario